ROSS Stores, Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 20 August 2026: press release. Guidance figures: 6 raised, 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Sales rose 13% on comparable growth: Sales rose 13% to $6.3 billion from $5.5 billion. Comparable store sales rose 10% on top of a 2% gain last year. Source
• Diluted EPS reached $2.66: Net income was $851 million against $508 million a year earlier. Diluted EPS was $2.66 against $1.56. Source
• IEEPA tariff refunds of $253 million: Operating profit of $1.1 billion includes about $253 million of IEEPA tariff refunds recognized in the quarter. Source
• Operating margin rose 610 basis points: Operating margin rose 610 basis points, of which 405 came from the tariff refunds. Excluding the refunds, the increase was 205 basis points. Source
• 2026 store plan raised to 115: Management raised the 2026 new store opening plan to 115 locations, about 90 Ross Dress for Less and 25 dd's DISCOUNTS stores. Source
• Merchandise, marketing and store experience: Management credited merchandise offerings, marketing initiatives and in-store experience enhancements for the sales and earnings growth. Source
• Operating cash flow of $1.71 billion: Net cash provided by operating activities was $1.71 billion for the six months, against $1.08 billion a year earlier. Source
• Back-half comparisons tougher, guidance raised: Management described significantly tougher back-half comparisons and raised third- and fourth-quarter guidance, with third-quarter comparable sales at 6% to 7%. Source

“We achieved stellar sales and earnings growth in the second quarter.”

Jim Conroy, Chief Executive Officer

Guidance

What changed from last quarter

• Guidance raised: Fiscal 2026 EPS projection raised from $7.50 to $7.74 in the prior release to $8.61 to $8.77. Source
• Guidance raised: The 2026 new store opening plan was increased to 115 locations. Source
• New: Second-quarter results include IEEPA tariff refunds of about $253 million recognized in the quarter. Source
• Guidance kept: Share repurchase plan of $1.275 billion for fiscal 2026 was kept unchanged. Source

Second quarter results and growth

• Sales rose 13% on comparable growth: Sales rose 13% to $6.3 billion from $5.5 billion. Comparable store sales rose 10% on top of a 2% gain last year. Source
• Diluted EPS reached $2.66: Net income was $851 million against $508 million a year earlier. Diluted EPS was $2.66 against $1.56. Source
• Six-month sales up 17%: Six-month sales rose 17% to $12.3 billion from $10.5 billion, with comparable store sales up 13% and six-month diluted EPS of $4.69 against $3.03. Source

Tariff refunds and operating margin

• IEEPA tariff refunds of $253 million: Operating profit of $1.1 billion includes about $253 million of IEEPA tariff refunds recognized in the quarter. Source
• Refunds added about $0.60 to EPS: The refunds added about $0.60 to EPS in the quarter. The same refund amount is included in six-month results. Source
• Operating margin rose 610 basis points: Operating margin rose 610 basis points, of which 405 came from the tariff refunds. Excluding the refunds, the increase was 205 basis points. Source

“Importantly, that growth was supported by both an increase in new customers and higher engagement from existing customers.”

Jim Conroy, Chief Executive Officer

Costs and operating income

• Cost of goods sold rose: Cost of goods sold was $4.15 billion for the quarter against $4.00 billion a year earlier. Six-month cost of goods sold was $8.38 billion. Source
• Selling and administrative costs rose: Selling, general and administrative expense was $1.02 billion for the quarter against $889 million a year earlier. Source
• Operating income reached $1.1 billion: Quarterly operating income was $1.10 billion against $638 million. Six-month operating income was $1.91 billion against $1.24 billion. Source
• Tax provision rose with earnings: The provision for taxes on earnings was $283 million for the quarter against $163 million a year earlier. Source

Store growth and footprint

• 47 new stores opened: The company opened 47 new stores in the quarter, 35 Ross and 12 dd's DISCOUNTS. Total stores reached 2,328 from 2,233. Source
• 2026 store plan raised to 115: Management raised the 2026 new store opening plan to 115 locations, about 90 Ross Dress for Less and 25 dd's DISCOUNTS stores. Source
• Ross footprint at quarter end: Ross operated 1,952 locations in 44 states, the District of Columbia, Guam and Puerto Rico, as stated in the release. Source

“Despite facing significantly more challenging year-over-year comparisons in the back half, we are raising our outlook for both the third and fourth quarters.”

Jim Conroy, Chief Executive Officer

Customers, merchandise and marketing

• Merchandise, marketing and store experience: Management credited merchandise offerings, marketing initiatives and in-store experience enhancements for the sales and earnings growth. Source
• New and existing customers both grew: Management said growth came from both more new customers and higher engagement from existing customers. Source
• Customer traffic drove comparable sales: Comparable store sales growth was primarily driven by customer traffic, and management saw strength throughout the quarter. Source

Cash, capital and shareholder returns

• Share repurchases in second quarter: 1.4 million shares were repurchased for $319 million in the quarter under the two-year $2.55 billion authorization approved in March 2026. Source
• Operating cash flow of $1.71 billion: Net cash provided by operating activities was $1.71 billion for the six months, against $1.08 billion a year earlier. Source
• Cash balance rose to $4.29 billion: Cash and cash equivalents were $4.29 billion at August 1, 2026, against $3.85 billion a year earlier. Source
• Dividends and debt repayment: Six-month dividends paid were $286 million, and $500 million of long-term debt was repaid, against $700 million a year earlier. Source
• Property spending rose: Additions to property and equipment were $460 million for the six months, against $409 million a year earlier. Source

Strategy, team and back-half guidance

• Back-half comparisons tougher, guidance raised: Management described significantly tougher back-half comparisons and raised third- and fourth-quarter guidance, with third-quarter comparable sales at 6% to 7%. Source
• Expansion strategy in new and existing markets: Management said it remains encouraged by the expansion strategy across new and existing markets, which supports the raised store plan. Source
• Aim to capture market share: Management said the company is well positioned to capture additional market share and drive profitable growth over the long term. Source

Coming up, as management said on 20 August 2026

• Fall season plans in place: Management said it entered the Fall season with building momentum and plans already in place. Source

Figures management reported

Risks management discussed

• Demand: Management noted significantly more challenging year-over-year comparisons in the back half of fiscal 2026. Source

Earlier plans management reported on

• Ahead: Second-quarter EPS of $2.66 was above the $1.85 to $1.93 guidance, including about $0.60 from tariff refunds. Source
• Ahead: Operating margin excluding the refunds rose 205 basis points, compared with a plan of 130 to 150 basis points. Source
• Not stated: The prior release forecast second-quarter comparable store sales growth of 6% to 7%; the current release reports 10%.

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.